Market rallies as launch looms

PUBLISHED : Wednesday, 05 September, 2001, 12:00am
UPDATED : Wednesday, 05 September, 2001, 12:00am

China's first open-ended fund is set for launch next week as Beijing moves to widen its range of investment tools.

Huaan Innovation Fund will launch the retail tranche next Tuesday, with institutional subscription set to begin on September 19.

News of the pending launch boosted mainland stocks yesterday, overcoming downward pressure from recent crackdowns on stock manipulation and corporate skulduggery.

The Shanghai A-share index closed up 2.42 per cent as Shenzhen A shares strengthened 2.52 per cent. The Shanghai B-share index jumped 5.76 per cent, while Shenzhen B-shares gained 4.82 per cent during the day.

The fund aims to raise five billion yuan (about HK$4.68 billion), said a Huaan announcement published in mainland newspaper China Securities yesterday.

Sixty per cent of that has been tentatively earmarked for retail investors, with the rest reserved for institutional buyers.

Shanghai-based Bank of Communications will help Huaan market the fund. Advising Huaan on the deal is JP Morgan Fleming Asset Management.

'The fund will be invested in financial instruments with good liquidity, including domestically listed stocks, bonds and other financial instruments the China Securities Regulatory Commission has allowed funds to invest in,' said its prospectus.

The prospectus identifies the fund's major investment focus as shares and corporate bonds issued by 'innovative' listed companies, such as those in information technology, bio-pharmacy and new materials.